Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzle shrinks again - Eric Janszen

[goadam1]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

1 gold eagle.

[jiimbergin]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

i'm going to kick myself for not taking short positions at the close.

I'm probably going to kick myself for not taking a larger short position. I guess I have gotten too cautious after the past few months

[goadam1]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

I guess in ten years we will see if 10 shares of spy is more or less than 10 gold eagles. We will count after tax worth (yes the system is rigged).

[ASH]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

You know what, I don't need things to go to crap and be right on gold. I can't put 7 figures of worth into one asset. It is like betting.

I'm down with some gold. I have some gold.

My point is that the "pediction" was for doom and the market rallied.

If the world is going to muddle along, then I might as well muddle along with it.

Call me a sheeple.

MARKET UP.

I would love to hear explanations.

Including: wishful thinking, stocks as an inflation hedge, reflation works...

I was just being a wag earlier, but I'll take a stab. My stab is: short-term reaction based upon a combination of group-think and the central bank version of "beat the number". As someone else pointed out, if the cut is lower than the concensus forecast, then on the day of the cut the market falls; if it is larger than the concensus forecast, then the market rises. Everybody realizes that this is meaningless, so the day afterwards, it's back to chaotic fluctuation business as usual. At least that's my theory. If this upward movement is sustained, then that will be an indication that today's motion was more significant than simple "beat the number".

[akrowne]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

I can confirm that things are extremely dislocated with respect to retail...

First off, the price cuts have not actually been that impressive. It seems even liquidators have been reluctant to make deep price cuts... everyone seems to be flirting at a level right around operating margins and hoping "the storm will pass".

When the deals are in fact pretty good, the inventory gets cleaned out almost instantly. Also, small ticket items are vastly more likely to go than big ticket. I was at Circuit City store being liquidated last week and all the sub-40" HD TVs were GONE. Totally emptied out. But above 46" there was plenty of inventory, and the prices were just OK (a bit above internet wholesale in most cases).

In general, high-quality, reasonably-priced consumer electronics and other non-basic goods seem to be rare. You can find cheap crap, and over-priced good stuff, but not reasonably-priced good stuff. A friend of mine who spent 3 months previous travelling in Europe said the retail situation looked much better -- better selection and well-stocked.

It seems to me like most retailers in the US still CAN'T cut prices further. While they fail to do so and move inventory, more of them will go into bankruptcy. Then they'll be competing at liquidation, and prices will probably reach a trigger point and plummet (as you suggest, early 2009).

After that, it isn't clear to me that much new inventory will reappear as it used to. A bevvy of financial and logistical challenges have been added to the world trade arrangements that stock the majority of our retail shelves, plus, the horrible sales track record from the past year will discourage wholesalers from making plans to send goods to the US.

[metalman]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

You know what, I don't need things to go to crap and be right on gold. I can't put 7 figures of worth into one asset. It is like betting.

I'm down with some gold. I have some gold.

My point is that the "pediction" was for doom and the market rallied.

If the world is going to muddle along, then I might as well muddle along with it.

Call me a sheeple.

MARKET UP.

I would love to hear explanations.

Including: wishful thinking, stocks as an inflation hedge, reflation works...

wishful thinking. stocks are not an inflation hedge.

finster made a great point... the fed got 1mo tbills to 'rise' to 0.03% from 0.00%, 3mo. fro 0.02 from 0.01%, woo hoo! :eek:

got the dollar down to 80.0986 from 81.3300

got gold up to $858 from $830

[goadam1]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

You know what, I don't need things to go to crap and be right on gold. I can't put 7 figures of worth into one asset. It is like betting.

I'm down with some gold. I have some gold.

My point is that the "pediction" was for doom and the market rallied.

If the world is going to muddle along, then I might as well muddle along with it.

Call me a sheeple.

MARKET UP.

I would love to hear explanations.

Including: wishful thinking, stocks as an inflation hedge, reflation works...

[Spartacus]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

Aren't the oligarchs a pain for Putin, and a pro-western front within Russia?

and crushing them and making Putin's life easier does NOT help any US interest, even the FED's?

1. This ression has destroyed the Hedge Funds that are the alter ego of the bond vigilanties of yester-year, AND on the international front, destroyed the Russian Oligarcs.

[metalman]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

Well, I had all my money with this absolute genius named Bernard Madoff, and I've had much better returns with him than gold, since 1998!

you bet! and you can try to collect what's left of your $$$ from bernie when he's in his new digs...

[ASH]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

Crushing Russia's economy is not much of an accomplishment... :cool:

True, but I'd think this administration would take what it can get, in the foreign policy sphere! :cool:

[ASH]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

uhm what? what's done better than gold?

Well, I had all my money with this absolute genius named Bernard Madoff, and I've had much better returns with him than gold, since 1998!

[phirang]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

In my opinion, this theory doesn't wash because this recession is creating much bigger problems for America and the world than it is solving by starving Russia of cash. Is there any country which is not being hurt by the recession? This would really be a case of cutting off your nose to spite your face.

Crushing Russia's economy is not much of an accomplishment... :cool:

[Spartacus]

have to disagree about the availability of product

My question here is for clothes and high volume items, what number of items are sold in North America and parts of western Europe, and what is this as a fraction of the amount produced?

say 30% of the worldwide volume of manufactured clothes is sold in NA/ WE.

or in other words, 30% of product is sold to 10% of the population.

say this falls by 50%, and for the items that do sell, the price is cut in half.

This wipes out a lot of the profit margin for producers, but 85% of the volume of sales is still intact. Lower profit margin sales to 3rd / 2nd world countries, but it's still 85% of the business.

profit margins will collapse and lots of retail outlets will go under but the availability of manufactured goods should still be fine in the outlets that remain.

High margin and low-volume specialty items may be another story, as they don't have the volumes to fall back on.

[ASH]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

1. This ression has destroyed the Hedge Funds that are the alter ego of the bond vigilanties of yester-year, AND on the international front, destroyed the Russian Oligarcs.

In my opinion, this theory doesn't wash because this recession is creating much bigger problems for America and the world than it is solving by starving Russia of cash. Is there any country which is not being hurt by the recession? This would really be a case of cutting off your nose to spite your face.

[metalman]

Re: Fed cuts dollar, Fire sales vs FIRE sales, Duh-flation, and Bezzel shrinks again - Eric Janszen

Finally, our forecast for Dec. 16, 2008.
Dec. 16, 2008: 1% to 0.5%
Fed rate cut sinks dollar and stocks, boosts gold

The Federal Reserve reduced the Fed Funds interest rate to the lowest in history. The weak dollar sent oil and gold higher, while stock prices fell.

The rate cut was seen as largely symbolic as the Effective Funds Rate has not been higher than 0.5% since the rate cut to 1% on Oct. 29, 2008. As of Dec. 16, 2008, the effective rate was 0.14%, close to zero.

Rumors that the Fed is considering further unorthodox and radical monetary policy as interest rates approach zero sent the dollar down. Further weighing on the dollar was the revelation of the collapse of the $50 billion Bernard Madoff fund, run as, in Maddoff's words, a Ponzi scheme for many years under the noses of regulators.

Gold continues to outperform all other asset classes as it has since 1998.


uhm???

uhm what? what's done better than gold?